FY19 Results

5 February 2020
Agenda

1. FY19 results

2. Company initiatives
01
FY19 results
FY19 results

Key figures (€bn, % vs. 2018)


1 Challenging energy scenario Ordinary EBITDA Ordinary Net Income
-38% JKM/Brent


2 Acceleration of efficiency plan 4.7 +6% 1.4 +15%
€380m annual since 2018


3 Strong investment in renewables and electricity Capex Net Debt
>70% of growth & remunerated capex


4 Stable net debt after capex and shareholder 1.7 83% 15.3
remuneration growth &
BBB rating, stable outlook (S&P) remunerated

Growth despite challenging energy scenario

4
 EBITDA evolution (€m)

+ 6%

102 4,668
101 4,562
132 (47)
394 4,413 (106)
(33)
4,019
Including the following FX impacts:

€21m €16m -€74m €19m

FX: -€18m

EBITDA Non-ordinary Ordinary Gas & Power Infra. EMEA Infra. LatAm Infra. LatAm Corporate Ordinary Non-ordinary EBITDA
FY18 items EBITDA South North & other EBITDA items 1 FY19
FY18 FY19

Ordinary growth driven by regulated activities and efficiencies

Note: 5
1. Of which: -€168m corresponds to restructuring costs, €49m to provisions reversals, €24m to sales of land and buildings, -€20m to CNMC CCGT fine and other
 Net Income evolution (€m)

+15%
238
1,432 1,401
4,067 1,245 (51) (31)

(2,822)

Net Non-ordinary Ordinary Operations Others Ordinary Non-ordinary Net

income items net net items 1 income
FY18 income income FY19
FY18 FY19

Business growth translates into higher net income

Note:
1. Of which: -€126m corresponds to restructuring costs, €101m to Medgaz revaluation, €88m to asset disposals, -€73m to liability management costs, €33m to provisions reversal, -€23m to asset write down, -€20m to CNMC CCGT fine and other 6
 Sources and uses of cash (€bn)

5.6 5.6

One-off restructuring costs

0.3 0.2
Divestments (5%) (4%)

2.0 Minorities & other (36%)

Gross CF (95%)1 5.3 1.7 Dividends & share buy-

back (30%)

1.7 O.w. 83% growth &

Capex (30%)
remunerated

Cash sources Cash uses

Balanced cash flow distribution

Note:
7
1. CF from operations prior to interest expenses, taxes and restructuring costs
 Net debt evolution (€m)

Net Debt/ordinary EBITDA

Debt structure optimization
3.5x 3.3x

15,309 2,013 197 15,268

1,607
Corporate liability management ~€700m
1,720
International BU push down ~€1.8bn
(5,275) (303)

Green financing Spain ~€500m

Total ~€3bn
Net debt Gross Disposals Dividends, Capex1 Minorities FX & Net debt
FY18 CF Sh. BB, & other other FY19
others

Stable net debt after investments and shareholder remuneration

Note:
8
1. Net of cessions and contributions
 Shareholder remuneration

DPS (€/sh.) Share buy-back

0.29 1st interim  1st tranche completed

Paid €400m
July-19 (June 2019)
+5%
vs 2018

interim 
1
0.47
Paid
2nd 1.37 Share cancellation
November-19 16.6m
(August 2019) shares

0.60 2019 final

Proposal Second €400m tranche as of
March-20 ~€135m
the end of January-20

Solid basis to continue delivering our commitments

Note:
1. Subject to AGM approval 9
FY19 results by business unit
 Gas & Power

EBITDA evolution (€m) Highlights

190  Gas, Power & services sales: higher margins in power

1,441 supply partially offset by lower gas margins
93 1,453 77 1,420 21
1,360
(184)  International LNG: lower margins and volumes
(116) impacted by energy scenario vs. better conditions in
2018
Including the following FX impacts:
- €7m - €14m  Europe Power Generation: increased competition in
CCGTs and low gas prices, suspension of CCGTs
FX: €21m availability payments (full year effect) and subdued
hydro

 International Power Generation: higher margins and

sales, new installed capacity in operation and favorable FX
EBITDA Non-ordinary Ordinary Gas, Power Int. Europe International Ordinary Non-ordinary EBITDA
FY18 items EBITDA & services
FY18 sales
LNG Power
Gen.
Power
Gen.
EBITDA
FY19
items FY19
€778m capex, of which 80% growth & remunerated

Renewables and derisking partially offset scenario

11
 Infrastructure EMEA

EBITDA evolution (€m) Highlights

 Spain gas networks: stable activity and business

63 25 1,981
47 44 1,923 optimization
1,802 1,849
(58)
 Spain electricity networks: new investments and other
Including the following FX impacts:
regulated revenues along with lower interruption times
- - €16m
 EMPL: favorable FX and annual tariff increase partially
FX: €16m offset by lower demand

€432m capex, of which ~90% growth & remunerated

EBITDA Non- Ordinary Spain gas Spain elec. EMPL Ordinary Non- EBITDA
FY18 ordinary EBITDA networks networks EBITDA ordinary FY19
items FY18 FY19 items

Investments and optimization drive businesses

12
 Infrastructure South LatAm

EBITDA evolution (€m) Highlights

40 947
59 17 938  All businesses negatively impacted by FX
846 (15) (9)
55
791  Chile electricity: regulated revenues and business
Including the following FX impacts: optimization
- €14m - €1m - €6m - €53m
 Chile gas: higher margins and supply volumes
supported by operational improvements
FX: -€74m
 Brazil gas: lower opex and tariff indexation partially offset
by lower sales

 Argentina: impacted by overdue tariff adjustments and

general economic conditions

EBITDA Non- Ordinary Chile Chile Brazil Argentina Ordinary Non- EBITDA €283m capex, of which 80% growth & remunerated
FY18 ordinary EBITDA electricity gas gas & Peru EBITDA ordinary FY19
items FY18 FY19 items

Stable performance throughout major part of the year

13
 Infrastructure North LatAm

EBITDA evolution (€m) Highlights

42 377 376
 Mexico gas: tariff update, higher supply margins and opex
60 (1)
optimization

43 275  Panama electricity: new regulatory period and higher

demand as a result of higher temperatures
232 Including the
following FX impacts:

€11m €8m

FX: €19m

€167m capex, of which 100% growth & remunerated

FY18 Non-ordinary Ordinary Mexico Panama Ordinary Non-ordinary EBITDA

items EBITDA gas electricity EBITDA items FY19
FY18 FY19

Growth driven by regulatory updates

14
Summary 2019 and Outlook 2020
 Summary 2019

2019 targets met… …amid challenging scenario… …thanks to company initiatives

€bn Actual vs. budgeted scenario1

EBITDA
+11% Brent
Acceleration of efficiency plan

4.7
Ordinary
4.6
Reported . -38% JKM/Brent Portfolio derisking

Step up in renewables
Net Income
+11% CO2
Balanced capital allocation

1.4
Ordinary
1.4
Reported . -22% Spanish Pool

Our ability to adapt delivers solid results

Note:
1. Budgeted scenario basis: Brent 57.8 USD/bbl; JKM/Brent 15.1%; CO2 22.4 €/t; Pool 60.9 €/MWh 16
 Outlook 2020

 New renewables coming into operation ( >+700MW additions 9M19-2020E)

 Stability in LNG thanks to contract management (sales contracted: 90%)
Gas & Power
 Improvement in supply supported by lower procurement costs (Algeria, Norway…)

 New electricity networks regulatory framework (~€40m EBITDA impact)

Infra EMEA
 Step-down of EMPL capacity (February 2020)

Infra South  Tariff adjustments in Chile/Argentina vs. FX (-9% CLP/EUR, -6% BRL/EUR)
LatAm

Infra North  Higher demand and tariff updates (mid single digit growth)
LatAm

 ~€500m annual efficiencies by 2020: 2 years ahead of schedule

A challenging 2020 energy scenario to be offset by company initiatives

Note:
~€300m additional capture costs expected in 2020 17
02
Company initiatives
 We are becoming more efficient

Ordinary opex base evolution1 (€bn) Efficiencies (€m)

Accumulated efficiencies

~380 ~500
Original
2.5 target2 In 2019 In 2020E

2.3 ~120
2.0
1.9
~270

~110

FY17 FY18 FY19 2020E 2022E 2018 2019 2020E

Meeting efficiencies target 2 years in advance

Note:
19
1. Including accounting adjustments, FX and others
2. Constant perimeter 2017
 We are managing our risks (1/2)
International LNG

Contracted sales1 at beginning of period International LNG EBITDA (€m) Energy scenarios in two challenging years
Spot prices (USD/MMBtu)
25%
344 10
276 8

<50% 80% 90% 6

2
2017 2019 2020 ene feb mar abr may jun jul ago sep oct nov dic
2017 2019
JKM 2017 NBP 2017
JKM 2019 NBP 2019

We reduced our risk exposure… …increasing EBITDA stability… …even in adverse scenarios

Proactive measures reduce volatility & improve results

Note:
20
1. Includes physical contracts for LNG delivery and financial hedges
 We are managing our risks (2/2)
Spain gas networks

Illustrative cash-flow Manageable levers to mitigate impacts

Mitigation levers
€m
1 2

1 FY19 operating expenses ~240

2 Annual avg. growth capex ~200

FCF Proposed FCF Opex Growth FCF post

pre-adjust. regulatory post-adjust. measures Capex mitigation Total ~440
adj.1 measures levers

Focus on minimizing impact on FCF to protect our stakeholders

Note:
21
1. During transitory period 2021-26
 We are investing supporting the energy transition

FY19 growth & remunerated capex Installed capacity (GW)

5.2
Gas 4.5
25% 3.7
3.5
Renewables1
Renewables
~1.4bn 40% 2.0
Coal2 1.8 1.8

0.0
Electricity
35% 2017 2018 2019 2020

>70% of growth & remunerated capex on

Increasing renewable footprint
renewables & electricity networks

Deploying capital for the energy transition

Note: 22
1. Including hydro
2. Expected coal shut down in 2020 pending authorization
We are advancing in our ESG commitments (1/2)

Direct GHG emissions (MtCO2eq) New Global Environmental Policy & Plan

18.3 -16% New targets

Approval of new Environmental Plan 2018-22 compatible 1.5ºC
15.4 with a scenario

Eco-efficiency and resource consumption Water

consumption
-24%
progress

2018 2019

Environmentally reclaimed land Acc. hectares >1,000

16% reduction in GHG emissions

Significant advances in the decarbonization of our energy mix

23
 We are advancing in our ESG commitments (2/2)

Social and Governance highlights Leadership in ESG indexes

Approval of updated Corporate Responsibility & Human Rights policies by BoD Global
82 leader 3

UNE
Compliance Policies update Maximum
19601 AAA rating

% auditing
Consolidation of the responsible supply chain model >60 coverage 1 Global
4.9 leader 4

Households
Consolidation of the vulnerability plan >700 & reception Yearbook 2020
centers 2 Gold class

Sound and recognized ESG strategy

Notes: 24
1. ESG audits over total purchases with high ESG risk; 2. In Spain; 3. Gas Utility sector; 4. Gas, water & multi-utility sector
We pursue a balanced cash flow distribution

Current growth optionality (>30% of FFO)… …reinforced with levers for additional growth

Current growth
 
optionality Additional efficiencies Leverage capacity

 
FFO Committed cash
Scenario improvement Asset rotation
dividend

 
Dividend to Lower cost of debt Other (WC management…)
minorities

Maintenance
capex

Ordinary cash source Cash uses

A balanced cash flow distribution with significant room for growth

25
Conclusions


We are becoming more efficient


We are managing our risks


We are investing supporting energy transition


We are advancing in our ESG commitments


We pursue a balanced cash flow distribution

Continued and sustainable value creation

26
FY19 results
Q&A
Appendix
Alternative Performance Metrics
Naturgy's financial disclosures contain magnitudes and metrics drafted in accordance with International Financial Reporting Standards (IFRS) and others that are based on the Group's disclosure model, referred to as
Alternative Performance Metrics (APM), which are viewed as adjusted figures with respect to those presented in accordance with IFRS.
The chosen APMs are useful for persons consulting the financial information as they allow an analysis of the financial performance, cash flows and financial situation of Naturgy, and a comparison with other companies.
Below is a glossary of terms with the definition of the APMs. Generally, the APM terms are directly traceable to the relevant items of the consolidated balance sheet, consolidated income statement, consolidated statement of
cash flows or Notes to the Financial Statements of Naturgy. To enhance the traceability, a reconciliation is presented of the calculated values.

Alternative performance Reconciliation of values

Definition and terms Relevance of use
metrics 31 December 2019 31 December 2018
Measure of earnings before interest,
Ebitda Operating profit (2) Euros 4,562 million Euros 4,019 million taxes, depreciation and amortization and
provisions
Ebitda corrected of impacts like
restructuring costs and other non-ordinary
Ordinary Ebitda Ebitda - Non-ordinary items 4,668 = Euros 4,562 million + 106 4,413 = Euros 4,019 million + 394 items considered relevant for a better
understanding of the underlying results of
the Group.
Attributable Net Income corrected of
impacts like assets write-down,
discontinued operations, restructuring
Attributable net income of the period (2) - Non-
Ordinary Net income Euros 1,432 million = 1,401 + 31 Euros 1,245 million = -2,822+ 4,067 costs and other non-ordinary items
ordinary items
considered relevant for a better
understanding of the underlying results of
the Group.
Investments in intangible assets (4) + Investments Realized investments in property, plant &
Investments (CAPEX) Euros 1,685 million = 222 + 1,463 Euros 2,321 million = 281 + 2,040
in property, plant & equipment (4) equipment and intangible assets.

CAPEX (5) + Financial investments net of the Total investments net of the cash
Net Investments cash received from divestments (6) - Other Euros 1,303 million = 1,685 - 303 - 79 Euros -284 million = 2,321 – 2,548 - 57 received from divestments and other
proceeds/(payments) of investments activities (6) investing receipts.

Non-current financial liabilities (1) + "Current Euros 17,073 million (7) = 13,352 + 2,079
Gross financial debt Euros 17,987 million = 15,701 + 2,286 Current and non-current financial debt
financial liabilities" (1) + 1,642

Notes:
1. Consolidated balance sheet line item; 2. Consolidated income statement line item; 3. Consolidated statement of cash flows line item; 4. Figure detailed in the notes to the consolidated financial statements; 5. Figure detailed in the Alternative 29
Performance Metrics (APM); 6. Figure detailed in the Directors' Report; 7. As of 31/12/2018, proforma including the first impact from the application of NIIF16 (Euros 1,643 million)
Alternative Performance Metrics
Alternative performance
metrics
Net financial debt
Leverage (%)
Cost of net financial debt
Ebitda/Cost of net financial
debt
Net financial debt/LTM Ebitda
Net financial debt/ ordinary
EBITDA
Free Cash Flow after
minorities
Free Cash Flow
Notes:
1. Consolidated balance sheet line item; 2. Consolidated income statement line item; 3. Consolidated statement of cash flows line item; 4. Figure detailed in the notes to the consolidated financial statements; 5. Figure detailed in the Alternative
Performance Metrics (APM); 6. Figure detailed in the Directors' Report; 7. As of 31/12/2018, proforma including the first impact from the application of NIIF16 (Euros 1,643 million)
Reconciliation of values
Definition and terms Relevance of use
31 December 2019 31 December 2018
Current and non-current financial debt
Gross financial debt (5) - "Cash and cash Euros 15,309 million (7) = 17,073 - 1,716
Euros 15,268 million = 17,987 - 2,685 - 34 less cash and cash equivalents and
equivalents" (1) - "Derivative financial assets" (4) – 48
derivative financial assets
Net financial debt (5) / (Net financial debt (5) + The ratio of external funds over total
52.2% = 15,268 / (15,268 + 13,976) 51.2% (7) = 15,309 / (15,309 + 14,595)
"Net equity" (1)) funds
Amount of expense relative to the cost of
Cost of financial debt (4) - "Interest revenue" (4) Euros 626 million = 652 - 26 Euros 583 million = 557 - 19
financial debt less interest revenue
Ratio between Ebitda and net financial
Ebitda (5) / Cost of net financial debt (5) 7.3x = 4,562 / 626 7.5x (7) = 4,019 / 538
debt
Net financial debt (5) / Ebitda in the last four Ratio between net financial debt and
3.3x = 15,268 / 4,562 3.8x (7) = 15,309 / 4,019
quarters (5) Ebitda
Ratio between net financial debt and
Net financial debt (5)/ ordinary EBITDA (5) 3.3x = 15,268 / 4,668 3.5x (7) = 15,309/ 4,413
ordinary Ebitda
Cash flow generated by the Company
Free Cash Flow (5) + Dividends and other (4) + available to pay to the shareholders
Euros 1,958 million = 238 + 1,307 + 405 + Euros 3,054 million = 1,318 + 1,400 + 309
Acquisitions of treasury shares (4) + Inorganic (dividends or treasury shares), the
8 + 27
investments payments (4) payment of inorganic investments and
debt payments.
Cash flow generated from operating activities (3)
+ Cash flows from investing activities (3) + Cash
Euros 238 million = 4,021 - 1,456 – 1,599 Euros 1,318 million = 2,881 - 617 – 3,759 Cash flow generated by the Company
flow generated from financing activities (3) -
- 728 + 2,813 available to pay the debt.
Receipts and payments on financial liability
instruments (3)
30
ESG metrics
ESG metrics FY19 FY18 Change Comments

Health and safety

Lost time (LT) incidents (1) units 14 16 -12.5% Improving metrics vs. FY18

Stable vs. 2018 although with lower accidents and working hours and below
LT Frequency rate (2) units 0.12 0.12 0.0%
sector average

Environment

GHG Emissions M tCO2 e 15.4 18.3 -15.8%

Coal abatement and increased renewables capacity and production vs. FY18
Emission factor t CO2/GWh 301 342 -12.0%

Emissions-free installed capacity % 30.1 27.5 9.5%

New renewable capacity coming into operation
Emissions-free net production % 27.0 24.9 8.4%

Interest in people

Number of employees persons 11,847 12,700 -6.7% Perimeter changes and efficiencies

Ratio reduction explained by the impact from a different mix of training

Training hours per employee hours 25.2 49.9 -49.5%
methodologies (i.e. higher online training)

Women representation % 32.4 31.0 4.5% Commitment for diversity and gender equality policies

Society and integrity

Economic value distributed M€ 21,533 23,413 -8.0% Affected by lower purchases and external services

Notifications received by the ethics committee units 194 199 -2.5% Improved oversight and accountability

Notes: 31
1. In accordance to OSHA criteria; 2. Calculated for every 200,000 working hours
Disclaimer

This document is the property of Naturgy Energy Group, S.A. (Naturgy) and has been prepared for information purposes only.
This communication contains forward-looking information and statements about Naturgy. Such information can include financial projections and estimates, statements
regarding plans, objectives and expectations with respect to future operations, capital expenditures or strategy.
Naturgy cautions that forward-looking information are subject to various risks and uncertainties, difficult to predict and generally beyond the control of Naturgy. These risks
and uncertainties include those identified in the documents containing more comprehensive information filed by Naturgy and their subsidiaries before the different
supervisory authorities of the securities markets in which their secuirities are listed and, in particular, the Spanish National Securities Market Commission.
Except as required by applicable law, Naturgy does not undertake any obligation to publicly update or revise any forward-looking information and statements, whether as a
result of new information, future events or otherwise.
This document includes certain alternative performance measures (“APMs”), as defined in the Guidelines on Alternative Performance Measures issued by the European
Securities and Markets Authority in October 2015. For further information about this matter please refer to this presentation and to the corporate website
(www.naturgy.com).
This document does not constitute an offer or invitation to purchase or subscribe shares, in accordance with the provisions of the restated text of the Securities Market Law
approved by Royal Legislative Decree 4/2015, of 23 October and their implementing regulations. In addition, this document does not constitute an offer of purchase, sale or
exchange, nor a request for an offer of purchase, sale or exchange of securities, in any other jurisdiction.
The information and any opinions or statements made in this document have not been verified by independent third parties; therefore, no warranty is made as to the
impartiality, accuracy, completeness or correctness of the information or the opinions or statements expressed herein.
This presentation is property of Naturgy Energy Group, S.A. Both its content and
design are for the exclusive use of its personnel.

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